For Schnuck Markets’ corporate team, the decision to bring electronic shelf labels into stores stemmed from firsthand experience.

The grocer’s corporate technology staff routinely spends time working as store associates in stores in order to understand the company’s day-to-day needs. During one recent exercise, they realized how arduous the process of hanging shelf labels throughout stores turned out to be.

“We realized how much it sucked,” Dave Steck, vice president of IT infrastructure and application development at Schnuck Markets, recounted to grocery industry attendees at a Groceryshop session in September 2022.

Now, the Midwestern grocery chain is intent on expanding electronic shelf labels (ESLs) across all of its stores as not just a way to free up associates for other tasks, but also to boost operational efficiencies and tap into new retail media offerings.

Schnucks is not alone in the endeavor. Several other grocers have also turned to ESLs for pilots or fleet-wide deployments, including Kroger, Hy-Vee and Chicago startup Dom's Kitchen & Market. Ahold Delhaize USA is piloting ESLs at undisclosed locations with hopes of scaling the technology.

With the price tags for electronic shelf labels dropping in recent years and labor costs simultaneously rising, grocery industry sources said they expect to see the technology scale quickly. At the same time, vendors said they are working to overcome battery life constraints and network connectivity issues with new device models, making the technology more reliable and consistent.

ESLs can give retailers a better view of pricing data, inventory and out-of-stocks, said Anne Mezzenga, a Target veteran and co-CEO of retail blog Omni Talk, and could ultimately help inform retailers’ retail media efforts.

“They tackle the big issue of changing prices and the loss that grocery retailers can experience when they don’t have accurate pricing on shelf,” Mezzenga said.

Boosting store operations and labor efficiencies

At Schnucks’ stores without electronic shelf labels, workers replace thousands of tags each week. “It’s a lot of labor to do very little,” Steck said at Groceryshop.

Schnucks, which currently has ESLs installed at a handful of stores, is working toward a chainwide deployment of Hanshow’s digital tags within two years. The company sees a roadmap of possibilities for what the tags can unlock, Steck and Bob Hardester, the grocer’s senior vice president, chief information officer and chief supply chain officer, said in a joint interview.

“The store teams [with ESLs] absolutely love it,” Steck told Grocery Dive.

Hanshow and SES-imagotag are the two ESL providers linked with Instacart’s Carrot Tag software, which has pick-to-light capabilities for Instacart workers.

ESLs can make stocking and e-commerce fulfillment faster and more efficient. Tags with LED lights on them can flash for pick-to-light and stock-to-light functionalities, helping people locate products more quickly, sources said. Solum’s Newton tag, for example, has seven LED lights, which workers could use to fulfill seven orders by assigning a different color to each one, said James (Hyunseok) Jeong, a business manager with Solum.

In addition, Solum’s Newton tag lets shoppers use their smartphones to communicate with the ESL, allowing them to more easily access and download digital deals in-store, said Jeong.

Instacart’s Carrot Tags also use lights to help people find products and display key product information, such as whether an item is gluten-free, organic, kosher or EBT SNAP-eligible. 

For products with multiple facings, using the flashing LEDs coupled with inventory management insights can make it faster for store workers or shoppers to find or put away items, Hardester said. In three stores, Schnucks has reserved two of the seven ESL’s LED colors for pick-to-light functionality for Instacart workers to pick online orders, he said.

For out-of-stocks, “you could give them a QR code to scan [on the tag] if they'd like to know when the product is back at the store,” Hardester said. Schnucks has already connected its ESLs to its shelf-scanning Simbe robots, which are deployed fleet-wide. 

“If an item is out on the shelf and we know that that item is not in the store, we should flip [the tag to say] it to ‘temporarily out’ and that drives down customer questions, because even though they see an empty shelf, if it’s a traditional paper tag, the customer is still going to ask the teammate, ‘Well do you have this in the backroom?’” Steck said. 

ESL makers Solum and Pricer both note that their tags can have different “pages” for a single product. For example, the tags could display stocking levels in the early morning hours when workers are stocking levels, then switch to consumer-facing pricing and other information during operating hours. 

Good Food Holdings, which runs grocery stores along the West Coast under banners including Metropolitan Market, Bristol Farms, Lazy Acres, New Seasons Market, also sees benefits in using ESLs to guide people to products in its stores, said CEO Neil Stern. 

The retailer has added ESLs from SES-imagotag equipped with Carrot Tag capabilities to some shelves in a Bristol Farms store in Irvine, California, as part of Instacart’s Connected Stores program, Stern said. Good Food Holdings also have ESLs from SES-imagotag at a Metropolitan Market location in Seattle, he added.

While the labor savings offered by ESLs were noteworthy, Stern said those benefits alone weren’t strong enough to convince him to move ahead with the technology. But now that ESLs have evolved to the point that they can operate in combination with other pricing tools, serve as beacons for consumers and Instacart shoppers, and help with out-of-stock monitoring they are considerably more compelling, he said.

“You can envision a future where if I'm a shopper and I want gluten-free products, for example, I can have the shelf tags light up and just show me gluten-free. That's an advanced capability,” Stern said.

For dark store operations, ESLs can help provide insight into where products are located and what their stock levels are, said Robert Willcox, a vice president with digital shelf tag company Pricer and a former Whole Foods Market IT executive. 

ESLs also can tie into sustainability efforts by eliminating the need to print out tags and shelf talkers, Mezzenga said. To cut down on food waste, Schnucks is using ESLs for markdowns for products nearing their expiration date, Hardester said.

Unlocking new merchandising and marketing options

Neil Saunders, managing director of GlobalData Retail, said a key advantage of ESLs is that they can help retailers assure digitally savvy consumers that the prices displayed on their shelves are always up to date.

“What [can be] really frustrating for consumers is that the price that you're paying at the register is not the same as what the shelf label says because they've not got round to updating that shelf label, and it happens a lot,” Saunders said. “So obviously the electronic shelf-edge labels would give people the right price, which I think is a real advantage.”

Grocers are particularly susceptible to the possibility that a price on paper shelf tag might be out of date because they have so many SKUs, Saunders said. The risk of putting off a customer is heightened by the fact that people often buy so many products on a trip to the supermarket that they are unlikely to be able to recall the cost of every item when reaching the checkout counter.

The Schnucks executives said ESLs make it easier to have daypart pricing, such as offering specials during rush hour. “You don't have to follow your traditional ad cycles,” Hardester said, noting Friday Specials and daily happy hour deals become more feasible.

Schnucks is also planning to link ESLs with smart carts in the future for in-store navigation with the LEDs, Hardester said. 

“Your thinking has to go well beyond replacing a paper tag with an electronic tag. Your thinking has to go: How do I build this into my overall digital ecosystem and make this powerful for my customers, my CPGs, my merchants, my operators, my marketing?” Hardester said. 

ESLs are no longer just boring black-and-white digital screens. Some vendors’ efforts to expand the number of on-screen colors on their tags can provide even more aesthetic opportunities for grocers to use for marketing. 

Vendors with booths at the National Retail Federation’s conference in New York in January showed off tags in a variety of sizes. For example, a retailer may opt for a larger tag on an end-cap to make it more prominent or style information about deals in black text against a red stripe. 

Taking promotional opportunities a step further, grocers can tie cameras and sensors to ESLs to gather insight into real-time purchasing decisions at the physical shelf and then use that data under a retail media business to give CPGs a better understanding of offline shopping behavior, Mezzenga said. 

“If you’re a retailer and you aren’t looking at them yet, you should be,” Steck said about ESLs at Groceryshop. 

Schnuck Markets outlined plans earlier this year to install technology-driven salad bars designed by Picadeli of Sweden in 22 supermarkets under its Schnucks and Eatwell banners in Missouri and Illinois, executives of the companies said in interviews with Grocery Dive.

The Midwestern retailer debuted the first of the self-service stations in March at a Schnucks store in Eureka, Missouri, and opened two more at Schnucks locations in the Missouri communities of Crestwood and Town and Country, according to Geoff Wexler, vice president of deli and prepared foods for the grocery chain.

Schnucks began initial discussions with Picadeli’s licensee about potentially bringing the company’s futuristic equipment to its stores about two years ago, but put the idea on hold until December 2022, shortly after it began to gradually reintroduce traditional salad bars as the pandemic loosened its grip, Wexler said.

The grocer planned to replace all of the 16 legacy salad bars it brought back with units supplied by Picadeli U.S., which use artificial intelligence to track sales patterns and determine when to order products to maintain freshness, Wexler said. The modular stations also feature covers that stay closed except when customers take items, in order to keep cold air from escaping; hanging utensils to prevent handles from contacting food; and digital tags with descriptions of each product.

“When you compare them side by side, the open salad bar tends to dehydrate product. It tends to leave it exposed to potential airborne bacteria. Whereas this concept has a unique airflow” that keeps food from deteriorating, said Wexler, adding that shoppers quickly re-embraced salad bars when Schnucks brought them back. 

Picadeli owns and maintains the salad bars in addition to providing all of the food they stock.

Because the Picadeli process offers more control, “you have faster turns, the quality is better and you have less waste, and it all comes down to the waste,” Wexler said. 

Schnucks is the third U.S. grocery chain to roll out salad bars from Picadeli. Albertsons became the first supermarket operator in the country to install the units in December 2021 and, as of March, has the units in 17 Safeway, Kings Food Markets and Acme locations in Maryland, New Jersey, Virginia and Washington, D.C., according to Picadeli. Picadeli followed its arrangement with a three-store pilot with Ahold Delhaize banner The Giant Company, said Patrik Hellstrand, CEO of Picadeli U.S.

A commissary at Fort Belvoir in Virginia and a Glatfelter Insurance Group office in York, Pennsylvania, also have Picaldeli stations on site, Hellstrand said.

Picadeli announced plans to enter the U.S. market in early 2021, when the salad bar concept was already operating in about 2,000 European grocery stores.

Hellstrand and a partner, former McDonald’s and Chipotle executive Mats Lederhausen, together own a stake in Picadeli U.S. through Hejgreens, a holding company they control. Greenfood, a Swedish food company that is part of investment firm Nordic Capital and runs Picadeli’s European operations, is Hejgreens’ partner in the joint venture.

Hellstrand said Picadeli U.S. plans to continue expanding in the United States and is in talks with Albertsons about bringing its salad bars to more locations.

“When we came into this business, we thought that we could only execute well” in the highest-volume stores, Hellstrand said. “We've learned that our break-even … is much much, much lower than we thought. We can actually execute profitably for the retailer in about 80% of their stores.”

Whole Foods Market plans to bring the Amazon One palm recognition and payment system to all of the grocery chain’s more than 500 stores by the end of 2023, Amazon announced in a July blog post.

As of July, the biometric service was in place at over 200 Whole Foods locations in 20 states.

In a reflection of Amazon One’s expanding reach, Amazon said the technology, introduced in late 2020, is currently in operation at more than 400 retail locations in the U.S. and has generated 3 million uses, calling the figure a “critical milestone.” 

In June, by comparison, Amazon said the technology had been used more than 1 million times

Amazon-owned Whole Foods is broadening its deployment of the Amazon One technology as other retailers have adopted the system as a way to allow shoppers to identify themselves and pay for products. 

Panera Bread, for example, began testing the technology at two locations in March, and Amazon pointed out that it allows employees to offer a personalized experience to customers even before they are ready to pay for an order.

Amazon is also positioning Amazon One as a way to serve customers rapidly in crowded locations like sports facilities and airports.

Amazon offers the Amazon One service at stores in its Amazon Fresh supermarket chain in addition to Whole Foods stores.

During summer 2022, Whole Foods began rolling out Amazon One to 65 California stores in what was at the time the chain’s largest-scale deployment of the technology. In April, Amazon One showed up at 11 Whole Foods locations in the Denver area.

“Since we’ve introduced Amazon One at Whole Foods Market stores over the past two years, we’ve seen that customers love the convenience it provides, and we’re excited to bring Amazon One to all of our customers across the U.S.,” Leandro Balbinot, Whole Foods’ chief technology officer, said in a statement.

Since acquiring Whole Foods in 2017, Amazon has been adding its leading-edge technology to the specialty grocer’s stores and back-end operations. In addition to the Amazon One expansion, last year Amazon Dash Carts rolled out to several Whole Foods stores and two Whole Foods locations added the e-tailer’s frictionless Just Walk Out system. Both technologies have yet to expand beyond these test runs. 

Wakefern is placing tech-enabled sampling kiosks in 95 ShopRite and The Fresh Grocer stores following a successful pilot, according to an announcement in May.

The Freeosk interactive kiosks dispense product samples to shoppers after they scan in with their phone, allowing the system to gather data and see if that trial led to a purchase. Freeosk and Wakefern have positioned the kiosks as a way to drive product discovery and build out the retailer’s growing retail media network.

As grocers expand their retail media networks, Freeosk’s tech-enabled kiosks offer an example of how companies are trying to boost shopper tracking and monetization inside stores.

To use the terminals, shoppers download the Freeosk app and then scan in at the machine when prompted. They can choose a product from a list of options and then receive a packaged sample from the kiosk.

The system collects data from shoppers and can identify if and when those customers purchase the specific items they tried, thus closing the loop on measurement, according to Freeosk’s website.  

According to the announcement, “Freeosk campaigns generate an average sales lift of over 50%, with 70% of buyers being new to brand and over 20% of converted shoppers repeating purchases post-campaign.”

That offers Wakefern an opportunity to generate revenue from CPG companies by offering an in-store space where they can trial and track new products.

“By capturing the shopper activity, brands are provided transparent measurement and retail media opportunities to engage with emerging and renewed brand users,” said Natalie Menza-Crowe, director of marketing and wellness strategy for Wakefern, in a statement.

Retailers have invested heavily in retail media capabilities, enticed by the opportunity to tap into a market that’s on track to hit more than $45 billion this year and more than $100 billion by 2027, according to Insider Intelligence. 

Many grocers and digital marketplaces now offer sponsored ads and search capabilities on their e-commerce platforms. But in-store retail media is still a relatively untapped market: According to a 2022 retail media report by Merkle cited in the announcement, just 9% of U.S. retail media networks offer in-store digital media for brand campaigns.

Wegmans began testing smart cart technology from Shopic at two stores early this, a spokesperson for the grocer said in an email. A Shopic representative confirmed that the company is working with Wegmans on the project.

One test got underway at a store the supermarket chain operates on Alberta Drive in Amherst, New York, and another began at Wegmans’ Monroe Avenue location in Rochester, New York, according to The Buffalo News, which first reported the development.

The Wegmans spokesperson noted that smart carts are an early-stage technology and that the grocery chain is in the preliminary stage of a “Test & Learn” pilot — indicating that Wegmans is in no rush to roll out a smart cart solution on a broad scale. 

“[We] recently selected customers to test the new technology as we take an iterative approach and focus on gathering feedback from a small group of customers,” the spokesperson said in an email. “Since we are in the early stages of our limited pilot, we aren’t yet able to share any specifics on next steps.”

Shopic’s smart cart technology is based on a clip-on unit that shoppers take from a rack and attach to an ordinary cart during their trip around the store. The device employs computer vision to identify products as people put them in the cart and is equipped with a screen that displays pricing and other details about each item. The artificial intelligence-driven system allows shoppers to pay for their purchases directly on the unit, according to Shopic.

Shopic is among a range of companies operating in the smart cart space. The group also includes Veeve, Amazon, Instacart-owned Caper AI and Cust2Mate, all of which have developed specialized carts that have product-scanning equipment permanently mounted to them.

In August 2022, Shopic announced it raised $35 million in a Series B funding round led by Qualcomm Ventures, bringing its total amount of financing from investors to $56 million. The summer prior, Shopic nabbed $10 million in funding.

Kroger is bringing digital smart screens to 500 of its stores across the U.S., per a May announcement.

The grocer is expanding its partnership with Cooler Screens, which makes digital smart screens, after a three-year pilot. 

With the technology from Cooler Screens, Kroger is looking to unlock more insights, measurement and activation by tying the smart screens to its retail media arm. 

Cooler Screens’ solution, which works with new or existing digital screens, uses the displays to showcase advertisements and product information, allowing shoppers to interact with digital merchandising.

Cooler Screens, which initially focused on cooler doors, recently expanded the types of surfaces that can support its technology as it looks to harness increasing interest by grocers on retail media networks and in-store digitization. In addition to coolers, retailers can place the equipment on surfaces including walls, end caps and windows, as well as at checkout lanes and in banner aisles.

The announcement did not specify which surfaces Kroger plans to use for the new screens. 

The announcement from Cooler Screens noted that the partnership helps Kroger customers make purchasing decisions based on their own preferences, diets, health needs, budgets and lifestyles. For brands, the screens provide a new avenue for in-store retail media. 

The expansion grows Kroger’s vision for its retail media plays, including its work with its data and analytics unit 84.51°, Cara Pratt, senior vice president at Kroger Precision Marketing, said in the announcement.

Along with Kroger, Cooler Screens also counts Walgreens, Giant Eagle’s GetGo convenience stores, Chevron and Western Union among its partners. 

Cooler Screens claims its advertising platform that enables a multi-retailer nationwide network is projected to reach more than 200 million monthly viewers in early 2024. At the National Retail Federation’s conference in January 2022, Cooler Screens said it has nearly 100 million viewers per month across 10,000 screens nationwide. 

At that conference, representatives for Cooler Screens said the company is working to quadruple the number of its screens in deployment in the next 12 to 18 months to 40,000 total.

Amid the current retail media boom, industry observers have noted that coolers are one area that grocers can turn to for advertising but cautioned that the benefits of in-store advertising are not as easy to measure. 

“From a consumer impact perspective, in-store screens, coolers and otherwise can be really effective,” Jordan Berke, CEO and founder of Tomorrow Retail Consulting, said earlier this year. 

SpartanNash announced in May that it’s rolling out aisle-scanning robots from Simbe to 15 Family Fare and Martin’s Super Market stores in Indiana and Michigan.

The expansion comes after the retailer and distributor piloted the use of Simbe’s Tally robot at select D&W Fresh Market stores.

With this, SpartanNash becomes the latest retailer to ramp up the use of aisle-scanning robots that gather shelf-level data used to help measure product performance, monitor product stock levels and more.

Tally uses 3D computer vision technology to capture between 15,000 and 30,000 products per hour across store departments, including frozen and refrigerated departments. Simbe’s Tally 3.0 version of the bot includes sharper optical technology than previous versions and utilizes the NVidia GPU platform to process data at the shelf edge and on the cloud, according to Simbe’s website.

In a video accompanying the announcement, Tally can be seen sporting a D&W logo on top and an introductory sign for customers that reads, “I check shelf inventory.” The bot conveys messages to shoppers about the tasks that it’s doing, as well, such as “Stock Check!” and “Going Home.”

BJ’s Wholesale Club also announced plans to roll out Simbe’s aisle-scanning robots to all of its locations, while Schnucks did the same in 2021. Other retailers like Hy-Vee and Save Mart have also partnered with Simbe.

But the technology hasn’t resonated with every retailer that has tested it. In 2020, Walmart ended its contract with Bossa Nova Robotics after the retailer concluded it wanted to use different technology to track shelf inventory levels.